Student Loans: Housing Bubble All Over Again

Student loan debt that surpassed total credit card debt in the U.S. This year’s graduating class of college seniors had the highest average debt to date, and that total just jumped above the $1 trillion mark.

And by the way, of that $1 trillion, approximately 80 percent was federal student loan debt and 20 percent was private student loan debt.

It used to be a college loan was an investment. In the current economy, it's turned out to be considerably less valuable than most of us ever imagined. So what happens? A whole bunch of Americans find themselves under water, with large debts they can't pay off easily, debts that no bankruptcy court can settle.

The big student-loan game-changer came in 2005, with the passage of the bankruptcy reform bill. It changed the law so that even private student loans couldn't be discharged during bankruptcy. What a bonanza for lenders, who quickly found a credit risk-free loan averaging 7 percent a year.

What's particularly depressing in some respects is that you see it everywhere that unions are claiming the problem is that the US doesn't spend enough money on education - if it's not elementary it's higher ed.

The reality is that even if that's partially the issue, the problem isn't one of resources but the value that Americans are getting from the resources spent. Besides, does the US really need that many liberal arts majors? How would spending more money on degrees that don't add value help?

An even better market, since you are mostly marketing the loans to eighteen year olds, and people who think that just having an education (no matter the cost or field) is going to make you more successful in life. It's a perfect scheme.

That being said, even the useful degrees do not have the salaries to match the skyward explosion in inflation of tuition.

dancedancekj saidAn even better market, since you are mostly marketing the loans to eighteen year olds, and people who think that just having an education (no matter the cost or field) is going to make you more successful in life. It's a perfect scheme.

That being said, even the useful degrees do not have the salaries to match the skyward explosion in inflation of tuition.

I think the fissures in Big Education are appearing though - so I think there are hopeful signs.

Here's a quote from the founder that I think might be a bit of a stretch but I think it's also achievable:

“A Computer Science degree might cost you $50,000 and take you four years to complete,” Carson tells me, “Treehouse can give you the skills you need and a potential job at the end, all for $150 in six months.”

Why wouldn't companies also consider using similar certifications in places like finance, accounting, and other technically oriented positions since much of the learning happens on the job anyway? In some respects it's both depressing but an amazing time in which we live. There's a growing divide between being credentialed versus actually being educated... as the formal education sector focuses on the former, they may be disintermediated by companies that can do both for a lot cheaper.

That's pretty cool. I never understood why we have kept the antiquated system of university in our modern day and age, since it is highly inefficient and 75% irrelevant for anything but interesting party conversation.

dancedancekj saidThat's pretty cool. I never understood why we have kept the antiquated system of university in our modern day and age, since it is highly inefficient and 75% irrelevant for anything but interesting party conversation.

I think it works particularly in computer science/programming which is far more of a meritocracy... by far, more people have gone into that field without having the requisite degree and they earn over 6 figures... it's pretty impressive.... the problem is getting through some of the hurdles especially with some of the more established firms out there. But smaller tech firms have always been willing to get more creative at hiring - companies like this I think bridge the gap.

White4DarkerFL saidSUNSHINESTATENEWS.COM IS SO FAR RIGHT-WING...THEY MAKE FOX NEWS LOOK 'FAIR AND BALANCED'....LOL.

I wouldn't know, but do you however disagree with their points? The logic is rather simple

1. Tuition being charged is outpacing inflation - and has been for the past several decades.

2. The value people see is not rising by the same amount - in fact to the point that with many degrees people are having difficulty finding jobs and when they can they aren't well paying - so it's no longer a strong investment.

3. Of the $1 trillion in student debt loans 80% is funded by the government in various forms (state and federal), while 20% is private.

Therefore some is going to give. It's not sustainable and therefore it can't be sustained - and yes, I know that's a tautology and that's sort of what makes it scary... when it comes crumbling down, there is going to be a lot of "friction"

It's a mantra burned into students' craniums since their elementary-school days: if you want to make something of your life, go to college. And if you really want to make something of your life, make it an Ivy League school.

Given recent developments in higher education specifically, and the economy generally, those suggestions sound like economists' hyped predictions before the demise of the dot-com and housing bubbles. In both instances, conventional wisdom held that investing in tech stocks or real estate would be a ticket to easy street.

Peddlers of higher education make similar claims today about the value of a university degree. As with tech stocks and real estate prior to their respective busts, a measure of justification exists for that optimism. Holders of bachelor's college degrees do earn more over a lifetime than their non-college educated counterparts, though the exact figure is disputed.

But that reality is changing fast. As a practical economic necessity, a postsecondary education isn't what it used to be. Even more, as the federal government continues to intervene through student-aide subsidies, grants, and guaranteed student loans, higher education is heading for a bust after booming for decades.

It's a mantra burned into students' craniums since their elementary-school days: if you want to make something of your life, go to college. And if you really want to make something of your life, make it an Ivy League school.

Given recent developments in higher education specifically, and the economy generally, those suggestions sound like economists' hyped predictions before the demise of the dot-com and housing bubbles. In both instances, conventional wisdom held that investing in tech stocks or real estate would be a ticket to easy street.

Peddlers of higher education make similar claims today about the value of a university degree. As with tech stocks and real estate prior to their respective busts, a measure of justification exists for that optimism. Holders of bachelor's college degrees do earn more over a lifetime than their non-college educated counterparts, though the exact figure is disputed.

But that reality is changing fast. As a practical economic necessity, a postsecondary education isn't what it used to be. Even more, as the federal government continues to intervene through student-aide subsidies, grants, and guaranteed student loans, higher education is heading for a bust after booming for decades.

More right wing 'news' which will give you every fact to support their position...while keeping you in the dark about facts opposing it.

It's a mantra burned into students' craniums since their elementary-school days: if you want to make something of your life, go to college. And if you really want to make something of your life, make it an Ivy League school.

Given recent developments in higher education specifically, and the economy generally, those suggestions sound like economists' hyped predictions before the demise of the dot-com and housing bubbles. In both instances, conventional wisdom held that investing in tech stocks or real estate would be a ticket to easy street.

Peddlers of higher education make similar claims today about the value of a university degree. As with tech stocks and real estate prior to their respective busts, a measure of justification exists for that optimism. Holders of bachelor's college degrees do earn more over a lifetime than their non-college educated counterparts, though the exact figure is disputed.

But that reality is changing fast. As a practical economic necessity, a postsecondary education isn't what it used to be. Even more, as the federal government continues to intervene through student-aide subsidies, grants, and guaranteed student loans, higher education is heading for a bust after booming for decades.

More right wing 'news' which will give you every fact to support their position...while keeping you in the dark about facts opposing it.

Another name for it is called...propaganda.

I'm open to the alternative view - which is...? as you have also seen dancedancekj who openly states that he votes democratic if I recall, has had similar issues though I don't think he has looked at causation.

Feel free to post - I think it's an important issue regardless of what you believe.

White4DarkerFL saidSUNSHINESTATENEWS.COM IS SO FAR RIGHT-WING...THEY MAKE FOX NEWS LOOK 'FAIR AND BALANCED'....LOL.

I wouldn't know, but do you however disagree with their points? The logic is rather simple

1. Tuition being charged is outpacing inflation - and has been for the past several decades.

2. The value people see is not rising by the same amount - in fact to the point that with many degrees people are having difficulty finding jobs and when they can they aren't well paying - so it's no longer a strong investment.

3. Of the $1 trillion in student debt loans 80% is funded by the government in various forms (state and federal), while 20% is private.

Therefore some is going to give. It's not sustainable and therefore it can't be sustained - and yes, I know that's a tautology and that's sort of what makes it scary... when it comes crumbling down, there is going to be a lot of "friction"

Conservatives have always opposed a classic liberal education. They don't want people learning about The Enlightenment, Philosophy and other studies in the Humanities.

To conservatives, human beings are resources, like trees or water. When you start educating them, they start questioning things. They reject the idea that they (and especially others) are a resource that is to be used and used up. This is why conservatives have such an obsession with supporting religion. For them, a perfect world are throngs of obedient slaves, toiling away for nickles, producing the next generation of slaves...and clinging to the hope that Jesus greets them warmly upon death.

White4DarkerFL saidSUNSHINESTATENEWS.COM IS SO FAR RIGHT-WING...THEY MAKE FOX NEWS LOOK 'FAIR AND BALANCED'....LOL.

I wouldn't know, but do you however disagree with their points? The logic is rather simple

1. Tuition being charged is outpacing inflation - and has been for the past several decades.

2. The value people see is not rising by the same amount - in fact to the point that with many degrees people are having difficulty finding jobs and when they can they aren't well paying - so it's no longer a strong investment.

3. Of the $1 trillion in student debt loans 80% is funded by the government in various forms (state and federal), while 20% is private.

Therefore some is going to give. It's not sustainable and therefore it can't be sustained - and yes, I know that's a tautology and that's sort of what makes it scary... when it comes crumbling down, there is going to be a lot of "friction"

Conservatives have always opposed a classic liberal education. They don't want people learning about The Enlightenment, Philosophy and other studies in the Humanities.

To conservatives, human beings are resources, like trees or water. When you start educating them, they start questioning things. They start to reject their idea they (and especially others) are a resource that is to be used and used up.

This is why conservatives love spreading religion. For them a perfect world are throngs of obedient slaves, clinging to the hope of Jesus greeting them warmly upon death. Pretty sad.

Ok I accept that claim and criticism - though I reject its conclusions. There are many on the right who also believe in the value of a liberal arts education. I think there's value to be had as well - but I also think that it should be integrated into a more general body of knowledge like critical thinking for any discipline.

That being said, I don't think society should be subsidizing any of this education given that the value is most accrued by individuals themselves. Countless studies also show that it is often already the wealthiest who avail themselves of these degrees as well - so why is it necessary to further subsidize them? Instead limit the amount of borrowing from government if it's absolutely necessary at all and let private firms charge market interest rates and accept the risks of default (and for goodness sakes, let students go bankrupt on their debts).

If you're looking to get an education without being productive to society, then why should society be responsible for paying for you? In an era where there just isn't the money any more, and that the costs are increasing far faster than inflation, something has got to give. Why is it costing so much more to give a liberal arts education is also a question you should be asking beyond its intrinsic value?

White4DarkerFL saidSUNSHINESTATENEWS.COM IS SO FAR RIGHT-WING...THEY MAKE FOX NEWS LOOK 'FAIR AND BALANCED'....LOL.

I wouldn't know, but do you however disagree with their points? The logic is rather simple

1. Tuition being charged is outpacing inflation - and has been for the past several decades.

2. The value people see is not rising by the same amount - in fact to the point that with many degrees people are having difficulty finding jobs and when they can they aren't well paying - so it's no longer a strong investment.

3. Of the $1 trillion in student debt loans 80% is funded by the government in various forms (state and federal), while 20% is private.

Therefore some is going to give. It's not sustainable and therefore it can't be sustained - and yes, I know that's a tautology and that's sort of what makes it scary... when it comes crumbling down, there is going to be a lot of "friction"

Conservatives have always opposed a classic liberal education. They don't want people learning about The Enlightenment, Philosophy and other studies in the Humanities.

To conservatives, human beings are resources, like trees or water. When you start educating them, they start questioning things. They start to reject their idea they (and especially others) are a resource that is to be used and used up.

This is why conservatives love spreading religion. For them a perfect world are throngs of obedient slaves, clinging to the hope of Jesus greeting them warmly upon death. Pretty sad.

Ok I accept that claim and criticism - though I reject its conclusions. There are many on the right who also believe in the value of a liberal arts education. I think there's value to be had as well - but I also think that it should be integrated into a more general body of knowledge like critical thinking for any discipline.

That being said, I don't think society should be subsidizing any of this education given that the value is most accrued by individuals themselves. Countless studies also show that it is often already the wealthiest who avail themselves of these degrees as well - so why is it necessary to further subsidize them? Instead limit the amount of borrowing from government if it's absolutely necessary at all and let private firms charge market interest rates and accept the risks of default (and for goodness sakes, let students go bankrupt on their debts).

If you're looking to get an education without being productive to society, then why should society be responsible for paying for you? In an era where there just isn't the money any more, and that the costs are increasing far faster than inflation, something has got to give. Why is it costing so much more to give a liberal arts education is also a question you should be asking beyond its intrinsic value?

Liberally educated people are better creative and critical thinkers....i.e. they question authority and the status quo. This is a huge value to progress and society.

If history has shown us anything, its that non critical thinking people are repeatedly manipulated by the powerful....and not just to do things against their self interest, but also the interests of others and even humanity. Non critical thinkers tend toward black/white thinking and commit more crimes, especially child abuse and hate crimes. And the big dangerous one...they're much more likely to follow authority than to question it or even oppose it.

Conservative education can be summed up as: Respect authority and tradition. People who rebel, criticize and question things are bad because they want to destroy what we built. And if you're on the short end of the stick...just remember that Jesus died for your sins, and if you obey, He will write your name in The Book of Life.

White4DarkerFL saidSUNSHINESTATENEWS.COM IS SO FAR RIGHT-WING...THEY MAKE FOX NEWS LOOK 'FAIR AND BALANCED'....LOL.

I wouldn't know, but do you however disagree with their points? The logic is rather simple

1. Tuition being charged is outpacing inflation - and has been for the past several decades.

2. The value people see is not rising by the same amount - in fact to the point that with many degrees people are having difficulty finding jobs and when they can they aren't well paying - so it's no longer a strong investment.

3. Of the $1 trillion in student debt loans 80% is funded by the government in various forms (state and federal), while 20% is private.

Therefore some is going to give. It's not sustainable and therefore it can't be sustained - and yes, I know that's a tautology and that's sort of what makes it scary... when it comes crumbling down, there is going to be a lot of "friction"

Conservatives have always opposed a classic liberal education. They don't want people learning about The Enlightenment, Philosophy and other studies in the Humanities.

To conservatives, human beings are resources, like trees or water. When you start educating them, they start questioning things. They start to reject their idea they (and especially others) are a resource that is to be used and used up.

This is why conservatives love spreading religion. For them a perfect world are throngs of obedient slaves, clinging to the hope of Jesus greeting them warmly upon death. Pretty sad.

Ok I accept that claim and criticism - though I reject its conclusions. There are many on the right who also believe in the value of a liberal arts education. I think there's value to be had as well - but I also think that it should be integrated into a more general body of knowledge like critical thinking for any discipline.

That being said, I don't think society should be subsidizing any of this education given that the value is most accrued by individuals themselves. Countless studies also show that it is often already the wealthiest who avail themselves of these degrees as well - so why is it necessary to further subsidize them? Instead limit the amount of borrowing from government if it's absolutely necessary at all and let private firms charge market interest rates and accept the risks of default (and for goodness sakes, let students go bankrupt on their debts).

If you're looking to get an education without being productive to society, then why should society be responsible for paying for you? In an era where there just isn't the money any more, and that the costs are increasing far faster than inflation, something has got to give. Why is it costing so much more to give a liberal arts education is also a question you should be asking beyond its intrinsic value?

Liberally educated people are better creative and critical thinkers....i.e. they question authority and the status quo. This is a huge value to progress and society.

If history has shown us anything, its that non critical thinking people are repeatedly manipulated by the powerful....and not just to do things against their self interest, but also the interests of others and even humanity. Non critical thinkers tend toward black/white thinking and commit more crimes, especially child abuse and hate crimes. And the big dangerous one...they're much more likely to follow authority than to question it or even oppose it.

Conservative education can be summed up as: Respect authority and tradition. People who rebel, criticize and question things are bad because they want to destroy what we built. And if you're on the short end of the stick...just remember that Jesus died for your sins, and if you obey, He will write your name in The Book of Life.

Apparently you didn't get a liberal arts education if your view is truly as rigid as you seem to argue. You don't need to have a liberal arts degree in order to have critical thinking skills. I am skeptical that liberal arts majors - different than "liberally educated people", are particularly better at critical thinking. Do you have any proof?

I would suggest for instance, that many computer programmers are far more skeptical of authority than many liberal arts majors. What is a conservative education? Sorry, your arguments are so lacking in reason it's difficult to understand what your argument and why you decided not to answer the basic question of why the cost of liberal arts has risen so dramatically in the last few decades without a commensurate improvement in quality or in numbers.

White4DarkerFL saidSUNSHINESTATENEWS.COM IS SO FAR RIGHT-WING...THEY MAKE FOX NEWS LOOK 'FAIR AND BALANCED'....LOL.

I wouldn't know, but do you however disagree with their points? The logic is rather simple

1. Tuition being charged is outpacing inflation - and has been for the past several decades.

2. The value people see is not rising by the same amount - in fact to the point that with many degrees people are having difficulty finding jobs and when they can they aren't well paying - so it's no longer a strong investment.

3. Of the $1 trillion in student debt loans 80% is funded by the government in various forms (state and federal), while 20% is private.

Therefore some is going to give. It's not sustainable and therefore it can't be sustained - and yes, I know that's a tautology and that's sort of what makes it scary... when it comes crumbling down, there is going to be a lot of "friction"

Conservatives have always opposed a classic liberal education. They don't want people learning about The Enlightenment, Philosophy and other studies in the Humanities.

To conservatives, human beings are resources, like trees or water. When you start educating them, they start questioning things. They start to reject their idea they (and especially others) are a resource that is to be used and used up.

This is why conservatives love spreading religion. For them a perfect world are throngs of obedient slaves, clinging to the hope of Jesus greeting them warmly upon death. Pretty sad.

Ok I accept that claim and criticism - though I reject its conclusions. There are many on the right who also believe in the value of a liberal arts education. I think there's value to be had as well - but I also think that it should be integrated into a more general body of knowledge like critical thinking for any discipline.

That being said, I don't think society should be subsidizing any of this education given that the value is most accrued by individuals themselves. Countless studies also show that it is often already the wealthiest who avail themselves of these degrees as well - so why is it necessary to further subsidize them? Instead limit the amount of borrowing from government if it's absolutely necessary at all and let private firms charge market interest rates and accept the risks of default (and for goodness sakes, let students go bankrupt on their debts).

If you're looking to get an education without being productive to society, then why should society be responsible for paying for you? In an era where there just isn't the money any more, and that the costs are increasing far faster than inflation, something has got to give. Why is it costing so much more to give a liberal arts education is also a question you should be asking beyond its intrinsic value?

Liberally educated people are better creative and critical thinkers....i.e. they question authority and the status quo. This is a huge value to progress and society.

If history has shown us anything, its that non critical thinking people are repeatedly manipulated by the powerful....and not just to do things against their self interest, but also the interests of others and even humanity. Non critical thinkers tend toward black/white thinking and commit more crimes, especially child abuse and hate crimes. And the big dangerous one...they're much more likely to follow authority than to question it or even oppose it.

Conservative education can be summed up as: Respect authority and tradition. People who rebel, criticize and question things are bad because they want to destroy what we built. And if you're on the short end of the stick...just remember that Jesus died for your sins, and if you obey, He will write your name in The Book of Life.

Apparently you didn't get a liberal arts education if your view is truly as rigid as you seem to argue. You don't need to have a liberal arts degree in order to have critical thinking skills. I am skeptical that liberal arts majors - different than "liberally educated people", are particularly better at critical thinking. Do you have any proof?

I would suggest for instance, that many computer programmers are far more skeptical of authority than many liberal arts majors. What is a conservative education? Sorry, your arguments are so lacking in reason it's difficult to understand what your argument and why you decided not to answer the basic question of why the cost of liberal arts has risen so dramatically in the last few decades without a commensurate improvement in quality or in numbers.

I didn't answer your question because the answer is pretty obvious.

Federal and state funding has all but dried up! Google "UC education state funding reduction" for a complete explanation. Outsourcing held other prices down, while education is more labor and real estate intensive.

Three years ago, I paid $2.25/gal for gas...now its $3.89. When was the last time you heard conservatives complain about that??? Oh yes, I forgot, objective information is not their game. Its usually Exxon, Koch Brothers, etc. who fund the think tanks behind these 'studies' that you seem so intent on spreading.

The biggest waste of education money is a business degree. Working in sales, I found my psychology and philosophy classes much better at teaching me to think on my feet. Business degrees are crap because they teach memorization...not critical thinking. Philosophy teaches the mechanics of thinking behind the great masters. History teaches the strategy and thinking of the greats who made history. Business degrees are memorization of the latest buzzwords and management fads. (Quick...what are the 4 P's of marketing...lol)

Federal and state funding has all but dried up! Good UC education system for a complete explanation. Outsourcing held other prices down, while education is more labor and real estate intensive.

Three years ago, I paid $2.25/gal for gas...now its $3.89. When was the last time you heard conservatives complain about that??? Oh yes, I forgot, objective information is not their game. Its usually Exxon, Koch Brothers, etc. who fund the think tanks behind these 'studies' that you seem so intent on spreading.

The biggest waste of education money is a business degree. Working in sales, I found my psychology and philosophy classes much better at teaching me to think on my feet. Business degrees are crap because they teach memorization...not critical thinking. Philosophy teaches the mechanics of thinking behind the great masters. History teaches the strategy and thinking of the greats who made history. Business degrees are memorization of the latest buzzwords and management fads. (Quick...what are the 4 P's of marketing...lol)

The problem with your argument blaming the lack of public funding for the rise in tuition is that the overall cost of education has risen considerably faster than inflation. Yes general prices have risen - and that's called inflation - that's why it's important to specify that they have risen considerably faster than inflation.

Your attacks on a business education notwithstanding, you still have not made any argument as to why it has risen faster than inflation - or the value of liberal arts degrees - given the difficulty of those with these degrees to get jobs that can ultimately pay for them. Why is it increasingly difficult if in fact they can create the value you argue they do?

Just blame businesses? Why is it that liberals or those who take liberal positions seem to always insist that the problem is someone else's doing? Where is the personal responsibility for making mistakes and correcting them?

Federal and state funding has all but dried up! Good UC education system for a complete explanation. Outsourcing held other prices down, while education is more labor and real estate intensive.

Three years ago, I paid $2.25/gal for gas...now its $3.89. When was the last time you heard conservatives complain about that??? Oh yes, I forgot, objective information is not their game. Its usually Exxon, Koch Brothers, etc. who fund the think tanks behind these 'studies' that you seem so intent on spreading.

The biggest waste of education money is a business degree. Working in sales, I found my psychology and philosophy classes much better at teaching me to think on my feet. Business degrees are crap because they teach memorization...not critical thinking. Philosophy teaches the mechanics of thinking behind the great masters. History teaches the strategy and thinking of the greats who made history. Business degrees are memorization of the latest buzzwords and management fads. (Quick...what are the 4 P's of marketing...lol)

The problem with your argument blaming the lack of public funding for the rise in tuition is that the overall cost of education has risen considerably faster than inflation. Yes general prices have risen - and that's called inflation - that's why it's important to specify that they have risen considerably faster than inflation.

Your attacks on a business education notwithstanding, you still have not made any argument as to why it has risen faster than inflation - or the value of liberal arts degrees - given the difficulty of those with these degrees to get jobs that can ultimately pay for them. Why is it increasingly difficult if in fact they can create the value you argue they do?

Just blame businesses? Why is it that liberals or those who take liberal positions seem to always insist that the problem is someone else's doing? Where is the personal responsibility for making mistakes and correcting them?

Why has food and fuel risen so fast?

Outsourcing has held down the general rate of inflation. Which means that good and services not affected by outsourcing will rise FASTER than the overall rate of inflation.

As a recent may graduate in May , from a 4 year private liberal arts school. I can tell you it is not truly worth the money. I have been unablento find a job , and had to settle to be a damn car salesman. I had alright grades, great business experience and leadership roles. And to become a car salesman. Unfortunately I was making more in one month, while still in high school than I have made in 6 months. Why ? Because my family and myself bought into the "system" . Yes college was great for " creative thinking " but I was already creative. And it did help me surround myself with people who would accept me . O and how to drink 7 nights a week.

I wouldn't trade my " experience" of being on a 4 year drunken binge and the lifelong friends I made . I truly don't believe it will ever benefit me in the future.

With the easy access to everything I self taught myself the landscaping world. By simply googling and visiting the library and reading !!!